www.Zillow.com is all the rage. Input any residential property address (well, almost any) and instantly find the estimated market value of the home. Neat huh? You no longer need a Real Estate Agent to help you figure out the value of your home when you are Selling, or a home you are interested in Buying - right? WRONG! IN CAPS! Here is the link to Zillow's accuracy report: http://www.zillow.com/howto/DataCoverageZestimateAccuracy.htm
In San Francisco they currently have a margin of error of 4.3% which is $32,250 on an average priced $750,000 home. Now I don't know about you, but paying $32,000 too much for a home, or selling a home for $32,000 too little, is REAL CASH. That's a LOT of money. You can't buy it for $32,000 less because Zillow says so - no Seller will just use Zillow and give that money away. And you can't sell for $32,000 more because no Buyer will just rely on the number and give that extra money away. Zillow also states that they are "within 10% of Selling price" 76% of the time. Huh??? So you really screw it up 24% of the time, and the other 76% you are within 10%? So for the property you are interested in, how will you know if the report is accurate or not, and if it's off up or down?? Answer: you don't!
Now let's compare a Realtor provide "CMA" (Comparative Market Analysis). To be honest some agents just run a quick report that takes them 5 minutes and their accuracy is only slightly better than Zillows. Why better? Because they have better data with their local MLS (Multiple Listing Service) access to recently sold homes. But a good agent who is looking out for the best interest of their client might spend 3 hours pouring over all available data - including photos of the comparable properties, the marketing remarks describing the property, the locations of each property and more. Only after finding 5 or more "truly" comparable properties will that agent deliver the "CMA" with confidence that the property is likely to sell with 1% of the report or less.
Zillow is fun. Zillow is NOT a replacement for painstaking research of the most recent information - and not just numbers and data - but of photos, locations (1 block can often make a HUGE difference in value), public and agent-only marketing remarks, and so on. I've got a home listed for sale right now at 2295 Vallejo Street - Zillow can't know that the building just passed a special assessment of $19,330 for this particular condo to repaint the building and give the unit new double paned windows. Will this effect value? Of course. Zillow can't know that this particular condo has a super high-end remodel job, and a million dollar view of the Golden Gate Bridge and San Francisco bay. And Zillow doesn't know why one comparable 1 block away sold for $800,000 while another sold for $1.3 million. But I can!! I'm an agent with access to ALL of the available information to help me determine the true market value of any San Francisco property. Plus, when I'm stumped because the data is all over the place, I can then call the Listing and the Buying agents of all of the Comparable properties that recently sold and ask them for their opinions and for clarifications on each of the properties.
No matter how smart Zillow gets, they can not replace a Realtor who painstakingly does the research to estimate the fair Market Value of a property. Agree or disagree? Please share you opinion.